Mr. Peabody chooses to invest in companies that produce goods and services at the lowest possible cost. Mr. Peabody is investing in companies that are
A) allocatively efficient.
B) productively efficient.
C) guaranteed to make a profit.
D) all of the above.
Answer: B
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If you invest $10,000 in a bond that earns 8% interest per year, how many years will it take to double your money?
A) 1 year and 3 months B) 2 years and 6 months C) 8 years D) 8 years and 9 months
In the ISLM framework, monetary policy has the greatest impact on equilibrium income
A) when money demand = money supply. B) when money supply is infinitely elastic. C) when the interest rate is high. D) the less is the interest-sensitivity of money demand.
The difference between traditional theories of the business cycle and real business cycle theory is the
a. emphasis they place on the government's role in the economy b. ideas they hold about the importance of investment in influencing the economy's growth path c. ideas they hold about the importance of technology in influencing the economy's growth path d. emphasis they place on the timing of the cycle e. way they define GDP and full employment, which means they describe the same events quite differently
The costs borne by an individual victim of theft can diverge from the social costs if the
A. stolen items were destroyed by the thief. B. stolen items were covered by insurance. C. stolen items were priceless. D. all of the options are correct.